Analysis of the NASDAQ 100 QQQQ

I'll be back with a broader view of the market, but for right now, I'm focussed in on the Q's as a barometer. The frozen credit markets have just as much affect on the Q's as any other index, being that tech companies are always in need of capital to finance R&D projects and as we all know, the Q's are tech-laden.

So read my commentary from yesterday on the Q's and there's a post about the economy and what went wrong below it, I'm getting a lot of positive feedback on that post, thank you.

Here's what I see, first of all, the descending triangle on the daily chart I posted last night, takes precedence over anything else, it is the most ominous formation in all of the coming analysis. We are in a bear market and in an unprecedented downtrend. The VIX is making new records everyday, including yesterday. We'll talk later about how to handle that.

Here are some charts to look at.

This red dashed line is a 10-min 30-bar WVAP (Volume weighted average price). First of all, you can see how it's been providing resistance lately. This is an indicator used by many on Wall Street including market makers. So I would not enter any position other than the low risk position I mentioned yesterday, until price breaks above this VWAP-maybe $30.75-$31 and then it needs to hold it, otherwise I'd lighten up the position.


The next picture is my Trend Channel in Blue. It has finally flattened out and obviously widened to accommodate the volatility. A move above the upper line, will show a definitive change in character and will be very bullish. Note the long Stochastics at the bottom, it's a 50 period and it recently is confirming the more neutral action in this consolidation.


Next this rainbow indicator is simply a series of different Bollinger Bands. Note how price bounces from one to another, suggesting the next move may be to the upper blue band around $32.


Next in blue is a 5-min chart of Worden's proprietary MoneyStream. What is interesting here is that it seems to confirm the notion that I laid out yesterday that perhaps traders and money managers are feeling more confident about the second test of support and are starting to pile in. The volume on yesterday's 10-min chart seems to show precisely that. Note that TSV10 (Time Segmented Volume) in the middle is doing roughly the same. Also the red selling in BOP (Balance of Power) at the bottom has dried up recently.


Here are 3 different 3C charts, 2 are 60-min and one is 30 min. they all show the same thing roughly as MoneyStream.




Last, this is a new indicator, formulated on volume and having nothing to do with TSV or 3C. It has been a very conservative indicator, rarely giving signals. I haven't even named it yet. What it is showing seems to be the theory that I'm laying out, with each successful test of support, more money is committing to the market or at least the Q's.


Here's the downside, a false breakdown or a bear trap below support could very well through all of this new money into a panic and we'd see another selling panic that would probably fulfill that descending triangles target. So if I was to enter this market, it as close to support as possible and with as tight a stop as possible under the support zone. Give it a few percent, but not more than that.

Give TeleChart or Blocks a try!